The rise of the “gig” economy: workers at risk of missing out on key protections up 84% since 2006

Issue date

16 Dec 2016

3.2 million UK workers (1 in 10) are now in precarious work – and the number of workers at risk of missing out on key employment protections has nearly doubled in a decade to 1.5 million (an increase of 700,000), according to a new TUC report published today (Thursday).

- 1 in 10 UK workers now in precarious jobs – including the so-called “gig” economy
- Sick pay, redundancy protection and protection from unfair sacking among rights at risk
- Zero-hours workers now earn a third less than average employees

3.2 million UK workers (1 in 10) are now in precarious work – and the number of workers at risk of missing out on key employment protections has nearly doubled in a decade to 1.5 million (an increase of 700,000), according to a new TUC report published today (Thursday).

The report – Living on the edge – shows that 1.5 million people now risk missing out on protection from unfair dismissal and the right to redundancy pay (even if they have worked for two years or more for an employer). And nearly half a million (485,000) have no legal right to sick pay due to low pay.

Living on the edge also reveals that the pay penalty for some forms of precarious working has got worse over the last decade:

Zero-hours workers now earn £3.80 less an hour than the average employee – a third less (34%), compared to 26% less in 2006. Hourly pay for zero-hours workers has increased by just 67p in the last decade

Self-employed workers now have earnings 40% lower than those of employees, compared to 28% lower a decade ago. One in three (34%) self-employed households earn less than £200 a week – over 1.2 million families.

Casual workers still get paid nearly 40% less an hour than the average worker – no improvement on a decade ago.

Living on the edge calls on Matthew Taylor’s independent review of employment practices to strengthen legal protections for precarious workers.

Commenting on the report, TUC General Secretary Frances O’Grady said:

“Insecure work has exploded in the past decade. In far too many cases, the only people who’ve benefitted are bad bosses. Sports Direct can’t be the employment model for the 2020s.

“Gig economy workers face the double hit of poverty wages and weaker employment rights. Whether they’re waiting tables or driving for Uber, all workers deserve respect, fair pay and basic protections. But the law hasn’t kept pace with how work has changed. That’s why the Taylor review must drag the rules that protect working people into the 21st century.

“Every day, unions expose the worst excesses of the gig economy and win important victories for workers across the country – just look at what we’re doing at Sports Direct and Uber. Any serious attempt to crack down on precarious jobs has to have trade unionism at its heart.”

Sophie Shaw, a waitress and union member who has worked in precarious jobs for eight years, said:

“Zero-hours contracts can feel like you have zero rights too. If you get sick when you should be working, you simply don’t get paid, and might even be considered unreliable by your manager.

“I’ve even seen a colleague continue working in the kitchen with a broken arm, because they couldn’t afford the time off.

“Making any sort of financial plan is impossible when you don’t have guaranteed hours and are on rubbish pay. It’s no way to live.”

ENDS

Notes to Editors:

- The TUC has a case study available for interview in London. Please contact the press office for further details.

- To estimate the number of employed people facing insecurity at work and how this has changed over time, the TUC used ONS Labour Force Survey data on:

The number of people engaged in temporary work that is seasonal, casual, or through an agency (that is, we have not included temporary workers on fixed term contracts).

The number of people on zero-hours contracts, excluding those who are self-employed, and those who would be included in the category above.

- The TUC also used the Social Market Foundation estimate of 1.7 million low-paid self-employed workers to bring the total to 3.2 million: bit.ly/2gEzi1c

- One in three (34%) families who rely on self-employment for all or part of their income earned less than £200 a week in 2015, according to new analysis in the report. This is more than 1.2 million families. However, this falls to one in seven (15%) for households without a self-employed worker.

Median hourly pay rates

Hourly pay rate (2006)

% of median earnings (2006)

Hourly pay rate

(2016)

% of median earnings (2016)

Average employed person

£8.93

100

£11.05

100

Zero-hours

£6.58

74

£7.25

66

Casual

£5.35

60

£6.70

61

Source: ONS Labour Force Survey

Median gross earnings (2014/15 prices)

Annual salary (2004/5)

% of median earnings (2004/5)

Annual salary (2014/15)

% of median earnings (2014/5)

Average employed person

£21,723

100

£20,448

100

Self-employed

£15,610

72

£12,198

60

Source: Family Resources Survey

Number of families earning less than £200 a week

Earning less than £200 a week (2015)

% of families

Non self-employed

2,920,849

15

Self-employed

1,256,469

34

Source: ONS Labour Force Survey

Number of workers earning less than £112 a week (sick pay threshold)

Earning less than £112 a week (2016)

% of

Permanent employed person

1.8 million

7

Zero-hours/ agency/casual

486,046

32

Source: ONS Labour Force Survey

- The TUC believes that the Taylor review of employment practices should examine the following areas:

1) Making sure everyone can access decent rights at work:

The TUC believes that existing rights should be available to all those in work, not only those who qualify for ‘employee’ status. This includes family friendly rights, protection from unfair dismissal and the right to redundancy pay.

2) Guarantee that self-employment is a choice made by the worker, not the employer:

Employers should not be able to ‘opt-out’ of their employment and tax responsibilities simply by labelling someone as self-employed. The TUC wants all workers to qualify for all workplace rights unless the employer can demonstrate the individual is genuinely self-employed.

3) Secure protection for everyone when they cannot work.

All workers, including those on low pay should be entitled to statutory sick pay and policymakers should look at extending other forms of support such as paternity pay.

4) Ensure that workers can challenge bad employers in court

Tribunal fees should be abolished. Since introducing fees of up to £1,200, the number of employment tribunal cases has fallen by over 9,000 a month.

5) Strengthen workers’ ability to organise for better conditions at work
Expanding union presence in workplaces is a vital route to tackling insecurity. A good start would be to make it easier for all workers, including those in precarious jobs, to be able to talk to a union rep. Unions should therefore have a right to access workplaces or to meet with staff during working hours.
- All TUC press releases can be found at tuc.org.uk/media
- TUC Press Office on Twitter: @tucnews

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